[Federal Register Volume 71, Number 17 (Thursday, January 26, 2006)]
[Proposed Rules]
[Pages 4332-4335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-730]



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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 204

[DoD-2006-OS-0005]
RIN 0790-AH93


User Charges

AGENCY: Department of Defense.

ACTION: Proposed rule.

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SUMMARY: The Department of Defense is revising 32 CFR Part 204 to 
better align it with OMB Circular A-25, ``User Charges.'' This part 
provides guidelines to establish appropriate charges for authorized 
services supplied by Department of Defense organizations when such 
services provide special benefits to an identifiable recipient beyond 
those that accrue to the general public.

DATES: Comments must be received by March 27, 2006.

ADDRESSES: You may submit comments, identified by docket number and or 
RIN number and title, by any of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Mail: Federal Docket Management System Office, 1160 
Defense Pentagon, Washington, DC 20301-1160.
    Instructions: All submissions received must include the agency name 
and docket number or Regulatory Information Number (RIN) for this 
Federal Register document. The general policy for comments and other 
submissions from members of the public is to make these submissions 
available for public viewing on the Internet at http://regulations.gov 
as they are received without change, including any personal identifiers 
or contact information.

FOR FURTHER INFORMATION CONTACT: Mr. T. Summers, 706-697-3193.

SUPPLEMENTARY INFORMATION:

Executive Order 12866, ``Regulatory Planning and Review''

    It has been determined that 32 Code of Federal Regulations (CFR) 
Part 204 is not a significant regulatory action. The rule does not:
    (1) Have an annual effect to the economy of $100 million or more or 
adversely affect, in a material way, the economy; a section of the 
economy; productivity; competition; jobs; the environment; public 
health or safety; or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another Agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.

Unfunded Mandates Reform Act (Sec. 202, Pub. L. 104-4)

    It has been certified that this rule does not contain a Federal 
mandate that may result in the expenditure by State, local and tribal 
governments, in aggregate, or by the private sector, of $100 million or 
more in any one year.

Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)

    It has been certified that 32 CFR part 204 is not subject to the 
Regulatory flexibility Act (5 U.S.C. 601) because it would not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities. The rule being promulgated provides guidelines to 
establish appropriate charges for authorized services supplied by 
Department of Defense organizations when such services provide special 
benefits to an identifiable recipient beyond those that accrue to the 
general public.

Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    It has been certified that 32 CFR Part 204 does not impose any 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act of 1995.

Executive Order 13132, ``Federalism''

    It has been certified that this rule does not have federalism 
implications, as set forth in Executive Order 13132. This rule does not 
have substantial direct effects on:
    (1) The States;
    (2) The relationship between the National Government and the 
States; or
    (3) The distribution of power and responsibilities among the 
various levels of government.

List of Subjects in 32 CFR Part 204

    Accounting, Armed forces, Government property.

    Accordingly, 32 CFR Part 204 is proposed to be revised to read as 
follows:

PART 204--USER CHARGES

Sec.
204.1 Purpose.
204.2 Applicability.
204.3 Policy and procedures.
204.4 Responsiblities.
204.5 Charges and fees.
204.6 Collections.
204.7 Legislative proposals.
204.8 Benefits for which no charge shall be made.

    Authority: 31 U.S.C. 9701.


Sec.  204.1  Purpose.

    This part implements the Department of Defense (DoD) program under 
Title 31, United States Code, section 9701 and Office of Management and 
Budget (OMB) Circular No. A-25, ``User Charges,'' to establish 
appropriate charges for authorized services supplied by DoD 
organizations.


Sec.  204.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments, the Chairman of the Joint Chiefs of Staff, the 
Combatant Commands, and the Defense Agencies (hereafter referred to 
collectively as ``Dod Components''). None of the provisions in this 
part should be construed as giving authority for the sale or lease of 
property, or the rendering of special services. Actions to convey such 
special benefits must be authorized by separate authority. This user 
charge policy is applicable except when other statutes or directives 
specifically direct other practices or procedures.


Sec.  204.3  Policy and procedures.

    (a) General. It is DoD policy not to compete unfairly with 
available commercial facilities in providing special services or in the 
sale or lease of property to private parties and agencies outside the 
Federal Government. However, when a service (or privilege) provides 
special benefits to an identifiable recipient, beyond those that accrue 
to the general public, a charge shall be imposed (to recover the full 
cost to the Federal Government for providing the special benefit, or 
the market price), except as otherwise approved by the Under Secretary 
of Defense (Comptroller) and authorized by the Director of the OMB. A 
special benefit will be considered to accrue, and a user charge shall 
be imposed, when a Government service:
    (1) Enables the beneficiary to obtain more immediate or substantial 
gain or values (which may or may not be measurable in monetary terms) 
than those which accrue to the general public; or
    (2) Provides business stability or contributes to public confidence 
in the business activity of the beneficiary (e.g., insuring deposits in 
commercial banks), or

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    (3) Is performed at the request of or for the convenience of the 
recipient, and is beyond the services regularly received by other 
members of the same industry or group or by the general public (e.g., 
receiving a passport, visa, airman's certificate, or a Custom's 
inspection after regular duty hours).
    (b) Costing. (1) Except as provided in Sec.  204.3(c) and Sec.  
204.8, a user charge shall be imposed to recover the full cost to the 
Federal Government of providing the service, resource, or good when the 
Government is acting in its capacity as sovereign.
    (2) User charges shall be based on market prices (as defined in 
Sec.  204.5(a)(4)) when the Government is not acting in its capacity as 
sovereign and is leasing or selling goods or resources, or is providing 
a service (e.g., leasing space in federally owned buildings). Under 
these business-type conditions, user charges need not be limited to the 
recovery of full cost and may yield net revenues.
    (3) User charges will be collected in advance of, or simultaneously 
with, the rendering of services unless appropriations and authority are 
provided in advance to allow reimbursable services.
    (4) Whenever possible, charges should be set as rates rather than 
fixed dollar amounts in order to adjust for changes in costs to the 
Government or changes in market prices of the good, resource, or 
service provided.
    (c) Exclusions (1) The provisions of this part to not apply when 
other statutes or DoD issuances require different practices or 
procedures, such as for:
    (i) Morale, welfare, and recreation services to military personnel 
and civilian employees of the Department of Defense and other services 
provided according to Sec.  204.8.
    (ii) Sale or disposal of surplus property under approved programs 
(Chapter 5 of DoD 7000.14-R \1\).
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    \1\ Copies may be obtained at http://www.dtic.mil/whs/directives/.
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    (iii) Services furnished the general public relating to, or in 
furtherance of, the Armed Forces recruiting program.
    (iv) Services furnished to representatives of the public 
information media in the interest of public understanding of the Armed 
Forces.
    (v) Armed Forces participation in public events. Charges for such 
participation are governed by the provisions of DoD Instruction 
5410.19.\2\
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    \2\ See footnote 1 to Sec.  204.3(c)(1)(ii).
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    (vi) Records made available to the public, under the Freedom of 
Information Act, pursuant to DoD Directive 5400.7.\3\ Charges for such 
record searches and copies of records are governed by Chapter 6 of DoD 
5400.7d-R.\4\
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    \3\ See footnote 1 to Sec.  204.3(c)(1)(ii).
    \4\ See footnote 1 to Sec.  204.3(c)(1)(ii).
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    (vii) Services furnished to non-Federal audio-visual media. Charges 
for such services are governed by the provisions of DoD Instruction 
5410.15.\5\
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    \5\ See footnote 1 to Sec.  204.3(c)(1)(ii).
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    (viii) Government-developed computer programs released to non-
Federal customers. Charges for software packages are governed by DoD 
Instruction 7930.2.\6\
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    \6\ See footnote 1 to Sec.  204.3(c)(1)(ii).
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    (ix) Pricing of performance by DoD Working Capital Fund activities 
which shall be according to Volume 11B of DoD 7000.14-R.
    (x) Foreign Military Sales of Defense articles and services which 
shall be according to Volume 15 of DoD 7000.14-R.
    (xi) Records made available to Privacy Act requesters shall be 
according to DoD Directive 5400.11 \7\ and DoD 5400.11-R.\8\
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    \7\ See footnote 1 to Sec.  204.3(c)(1)(ii).
    \8\ See footnote 1 to Sec.  204.3(c)(1)(ii).
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    (2) User charges may be waived by the Head of a DoD Component when:
    (i) Furnishing of their service without charge is an appropriate 
courtesy to a foreign government or international organization, or 
comparable fees are set on a reciprocal basis with a foreign country.
    (ii) The Director of the OMB has approved a request for an 
exception. Such exceptions may be recommended when:
    (A) The cost of collecting the fees would represent an unduly large 
part of the receipts from the activity; or
    (B) Any other conditions exists that, in the opinion of the Head of 
the DoD Component of his designee, justifies the exception.


Sec.  204.4  Responsibilities.

    (a) The USD(C) shall develop and monitor policies governing user 
charges.
    (b) The Heads of the DoD Components, or designees, shall:
    (1) Identify each service or activity that may properly be the 
subject of a user charge under this part.
    (2) Determine the extent of the special benefit provided.
    (3) Apply the principles specified in Sec.  204.5(a) in determining 
full cost or market price.
    (4) Review the user charges biennially, to include:
    (i) Assurance that existing charges are adjusted to reflect 
unanticipated changes in costs or market values; and
    (ii) A review of all other programs to determine whether fees 
should be assessed for Government services or the user of Government 
goods or services. DoD Components should discuss the results of the 
annual review of user fees and any resultant proposals in the Chief 
Financial Officers Annual Report required by the Chief Financial 
Officers Act of 1990.
    (5) Initiate exception actions outlined in Sec.  204.3(c)(2). All 
such actions shall be coordinated with the USD(C) prior to forwarding 
to the OMB.
    (i) Exceptions granted under Sec.  204.3(c)(2)(i) shall be renewed 
every four years to ensure that conditions warrant their continuation.
    (ii) Exceptions granted under Sec.  204.3(c)(2)(ii) shall be 
resubmitted for approval to the OMB every 4 years when conditions 
warrant their continuation.
    (6) Maintain readily accessible records of:
    (i) The services or activities covered by this part.
    (ii) The extent of special services provided.
    (iii) The exceptions to the general policy of this part.
    (iv) The information used to establish charges and the specific 
methods used in their determination.
    (v) The collections from each user charge imposed.
    (7) Maintain adequate records of the information used to establish 
charges and provide them upon request to OMB for the evaluation of the 
schedules and provide data on user charges to OMB according to the 
requirements in Circular No. A-11.
    (8) Develop legislative proposals as outlined in Sec.  204.7 when 
they are statutory prohibitions or limitations on the assessment of 
user charges.


Sec.  204.5  Charges and fees.

    (a) General. (1) All charges and fees shall be based on total cost 
to the U.S. Government or market price, whichever applies.
    (2) ``Full cost'' includes all direct and indirect costs associated 
with providing a good, resource, or service. These costs are outlined 
in Volume 11A, Chapter 1, paragraph 010203 of DoD 7000.14-R).
    (3) Full cost shall be determined or estimated from the best 
available records, and new cost accounting systems shall not be 
established solely for this purpose.
    (4) ``Market price'' means the price for a good, resource, or 
service that is based on competition in open markets, and

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creates neither a shortage nor a surplus of the good, resource, or 
service.
    (i) When a substantial competitive demand exists for a good, 
resource, or service, its market price will be determined using 
commercial practices, for example:
    (A) By competitive bidding; or
    (B) By reference to prevailing prices in competitive markets for 
goods resources, or services that are the same or similar to those 
provided by the Government (e.g., campsites or grazing lands in the 
general vicinity of private ones) with adjustments as appropriate that 
reflect demand, level of service, and quality of the good or service.
    (ii) In the absence of substantial competitive demand, market price 
will be determined by taking into account the prevailing prices for 
goods resources, or services that are the same or substantially similar 
to those provided by the Government, and then adjusting the supply made 
available and/or price of the good, resource, or service so that there 
will be nether a shortage nor a surplus (e.g., campsites in remote 
areas).
    (5) Charges and fees established in advance of performance shall be 
based on the estimated cost of performance Projected amounts shall be 
reviewed biennially or whenever significant changes in cost or value 
occur.
    (6) Management controls (see DoD Directive 5010.38 \9\) must be 
established to ensure that charges and fees are developed and adjusted, 
using current, accurate, and complete data, to provide reimbursement 
conforming to statutory requirements. These controls also must ensure 
compliance with cash management and debt collection policies according 
to Volume 5 of DoD 7000.14-R.
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    \9\ See footnote 1 to Sec.  204.3(c)(1)(ii).
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    (b) Information resources. These charges for services provided by 
data processing activities shall be determined by using the costs 
accumulated pursuant to requirements in OMB Circular A-130, 
``Management of Federal Information Resources.''
    (c) User fees for recurring services shall be established in 
advance, when feasible.
    (d) Lease or sale of property. Charges for lease or sale of 
property shall be based on the following:
    (1) Leases of military equipment or real estate. (i) In cases 
involving the lease or rental of military equipment, when there is no 
commercial counterpart, the charge will be based on the procedures 
attached in Volume 11A, Chapter 1, paragraph 010203.I of DoD 7000.14-R. 
The current interest rate in OMB Circular A-94 will be used in the 
computation of interest on investment in assets. In determining the 
value, consideration may be given to the responsibility of the lessee 
to assume the risk of loss or damage to the property and to held the 
government harmless against claims or liabilities by the lessee or 
third parties.
    (ii) In cases involving real estate outgrants the consideration for 
a lease shall be determined by appraisal of fair market rental value 
according to 10 U.S.C. 2667.
    (2) Sale of property. When there is legal authority to sell 
property to the public, the selling price of the property and related 
accessorial and administrative costs shall be computed according to 
Volume 11A, Chapter 1 of DoD 7000.14-R.


Sec.  204.6  Collections.

    (a) Collections of charges and fees will be made in advance or 
simultaneously with the rendering of service unless appropriations and 
authority allow otherwise. The policies in this part, Volume 5 of DoD 
7000.14-R, and DoD Directive 5010.38, shall be used in accounting, 
controlling, and managing cash and debt collections.
    (b) Unless a statute provides otherwise, user charge collections 
will be credited to the general fund of the Treasury as miscellaneous 
receipts, as required by 31 U.S.C. 3302.


Sec.  204.7  Legislative proposals.

    (a) Legislative proposals that allow the DoD Component to retain 
collections may be appropriate when a fee is levied in order to finance 
a service that is intended to be provided on a substantially self-
sustaining basis and thus is dependent upon adequate collections.
    (1) The authority to use fees credited to an appropriation is 
generally subject to limits set in annual appropriations language. 
However, it may be appropriate to request exemption from annual 
appropriations control, if a provision of the service is dependent on 
demand that is irregular or unpredictable (e.g., a fee to reimburse an 
agency for the cost of overtime pay of inspectors for services 
performed after regular duty hours).
    (2) Legislative proposals that permit fees to be credited to 
accounts shall be consistent with the full-cost recovery guidelines 
contained in this part. Any fees in excess of full cost recovery and 
any increase in fees to recover the portion of retirement costs which 
recoups all (funded or unfunded) accrual costs not covered by employee 
contributions are to be credited to the general fund of the Treasury as 
miscellaneous receipts.
    (b) Where the retention of the collections is appropriate, the DoD 
Components(s) concerned may submit appropriate legislative proposals 
under applicable legislative procedures included in OMB Circular A-19. 
These procedures may be obtained from the Office of Legislative 
Counsel, General Counsel, 1600 Defense Pentagon, Washington, DC 20301-
1600. Proposals to remove user fee restrictions or retain collections 
shall:
    (1) Define in general terms the services for which charges will be 
assessed and the pricing mechanism that will be used.
    (2) Specify whether fees will be collected in advance of, or 
simultaneously with, the provision of service unless appropriations and 
authority are provided in advance to allow reimbursable services.
    (3) Specify where collections will be credited. Legislative 
proposals should not normally specify precise charges. The user charge 
schedule should be set by regulation to allow for the administrative 
updating of fees to reflect changing costs and market values.


Sec.  204.8  Benefits for which no charge shall be made.

    (a) Documents and information requested by members of the Armed 
Forces when the documents or information requested is required by such 
personnel in their capacity as Service members.
    (b) Documents and information requested by members of the Armed 
Forces who are in a casualty status, or requested by their next of kin 
or legal representative.
    (c) The provisions of the address of record of a member or former 
member of the Armed Forces when the address is readily available 
through a directory (locator) service, and when the address is 
requested by a member of the Armed Forces or by a relative or a legal 
representative of a member of the Armed Forces, or when the address of 
record is requested by any source for the purpose of paying monies or 
forwarding property to a member or former member of the Armed Forces.
    (d) Services requested by, or on behalf of, a member or former 
member of the Armed Forces and civilian personnel of the Department of 
Defense (where applicable) or, if deceased, his or her next of kin or 
legal representative that pertain to the provision of:
    (1) Information required to obtain financial benefits regardless of 
the terms of separation from the Service.

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    (2) Document showing membership and military record in the Armed 
Forces if discharge or release was under honorable conditions, except 
as shown in paragraphs (d)(1) and (d)(4) of this section.
    (3) Information relating to a decoration or award or required for 
memoralization purposes.
    (4) Information relating to the review or change in type of 
discharge or correction of records.
    (5) Personal documents, such as birth certificates, when such 
documents are required to be furnished by the member.
    (6) Services that are furnished free according to statutes or 
Executive Orders.
    (7) Information from or copies of medical and dental records or x-
ray films of patients or former patients of military medical or dental 
facilities, when such information is required for further medical or 
dental care, and requests for such data are submitted by an accredited 
medical facility, physician, or dentist, or requested by the patient, 
his or her next of kin, or legal representative. Other requests subject 
to the Privacy Act shall be according to DoD 5400.11-R, ``DoD Privacy 
Act Program'' (see Sec.  204.3(c)(1)(xi) of this part).
    (8) Services requested by, and furnished to, a member of Congress 
for official use.
    (9) Services requested by state, territorial, county, or municipal 
government, or an agency thereof, that is performing a function related 
to or furthering a DoD objective.
    (10) Services requested by a court, when such services will serve 
as a substitute for personal court appearance of a military or civilian 
employee of the Department of Defense.
    (11) Services requested by a nonprofit organization that is 
performing a function related to or furthering an objective of the 
Federal Government or that is in the interest of public health and 
welfare, including education.
    (12) Services requested by donors in connection with the conveyance 
or transfer of a gift to the Department of Defense.
    (13) Occasional and incidental services (including requests from 
residents of foreign countries), that are not requested often, when it 
is determined administratively that a fee would be inappropriate for 
the occasional and incidental services rendered.
    (14) Administrative services offered by reference or reading rooms 
to inspect public records, excluding copies of records or documents 
furnished.
    (15) Services rendered in response to requests for classification 
review of DoD classified records, submitted under Executive Order 
12065, ``National Security Information,'' and implemented by DoD 
5200.1-R. Such services consist of the work performed in conducting the 
classification review or in granting and completing an appeal from a 
denial of declassification following such review.
    (16) Services of a humanitarian nature performed in such emergency 
situations as life-saving transportation for non-Armed Forces patients, 
search and rescue operations, and airlift of personnel and supplies to 
a disaster site. This does not mean that inter- and intra-governmental 
agreements to recover all or part of costs shall not be negotiated. 
Rather, it means the recipients or beneficiary will not be assessed a 
``user charge.''

    Dated: January 20, 2006.
L.M. Bynum,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 06-730 Filed 1-25-06; 8:45 am]
BILLING CODE 5001-06-M